In a landmark decision reflecting a potential turning of the tide for the LGBT community, the U.S. Court of Appeals for the Seventh Circuit has become the first federal appeals court in the nation to hold that discrimination on the basis of sexual orientation is a form of sex discrimination prohibited by Title VII. Hively v. Ivy Tech Community College of Indiana, No. 3:14-cv-1791 (7th Cir. April 4, 2017).

The Seventh Circuit began by observing that the question is not whether the court can, or should, add a new category of protection to Title VII, as that is beyond its authority. Instead, the court viewed itself as charged with interpreting the existing language of Title VII, specifically, whether discrimination based on “sex” includes sexual orientation.

The court considered a number of interpretive aids. It cited the U.S. Supreme Court’s blessings on expansion of traditional sex discrimination claims in such cases as Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57 (1986), which expanded the law to include sexual harassment, Oncale v. Sundowner Offshore Servs., Inc., 523 U.S. 75 (1998), expanding the law to include same-sex harassment, Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), expanding the law to include discrimination based on gender non-conformity, and Obergefell v. Hodges, 135 S.Ct. 2584 (2015), upholding the right of same-sex couples to marry. The Seventh Circuit noted that the Congress that enacted Title VII in 1964 may not have envisioned the necessity of these protections at the time, but nonetheless, experience has since caused the Supreme Court to recognize them as forms of prohibited sex discrimination.

The court also cited other Supreme Court decisions favoring sexual orientation-based protections, including Romer v. Evans, 517 U.S. 620 (1996), holding that a provision of the Colorado Constitution forbidding state government from taking action designed to protect “homosexual, lesbian, or bisexual” persons, violated the federal Equal Protection Clause; Lawrencev. Texas, 539 U.S. 558 (2003), wherein a Texas statute criminalizing homosexual sex between consenting adults violated the federal Due Process Clause; and United States v. Windsor, 133 S.Ct. 2675 (2013), striking down the Defense of Marriage Act’s exclusion of same-sex partners from the definition of “spouse.”

Ivy Tech argued that Congress has repeatedly considered—and refused—to add “sexual orientation” to the language of Title VII, and that should be interpreted as Congress’ intent to exclude it. This argument has been recited by numerous federal appellate courts in denying Title VII coverage to such claims. However, the Seventh Circuit noted that the legal landscape has changed over the years, and the Supreme Court has shed more light on the scope of the statute through its decisions, and for these reasons, the court was unable to draw any reliable inference from the failed “truncated legislative initiatives” in Congress.

As to the existence of the significant contrary authority, the court stated: “[T]his court sits en banc to consider what the correct rule of law is now in light of the Supreme Court’s authoritative interpretations, not what someone thought it meant one, ten, or twenty years ago.” The court reversed dismissal of Hively’s claim and remanded the case to the district court.

Inevitable Result, Uncertain FutureWith the landslide of litigation in the courts seeking protections for the LGBT community, it may have been inevitable that one of the federal circuit courts hearing such a case would eventually rule in favor of Title VII protection from sexual orientation discrimination. Indeed, numerous recent decisions that have refused to recognize such protections have acknowledged the untenable results that have come to pass in so holding. The Seventh Circuit’s decision recognized: “It would require considerable calisthenics to remove the ‘sex’ from ‘sexual orientation.’ The effort to do so has led to confusing and contradictory results…”

Indeed, many courts in other jurisdictions continue to find creative ways to allow sexual orientation-based claims to proceed despite the legal roadblock, including most recently, the Second Circuit’s decision last week that allowed a gay advertising executive to proceed with his Title VII claims based on gender non-conformity as opposed to sexual orientation. Christiansen, et. al. v. Omincom Group, Inc., 2017 WL 1130183 (2nd Cir. March 27, 2017).

With yesterday’s ruling, the Seventh Circuit has created a split in the federal circuit courts, making this issue ripe for U.S. Supreme Court determination. The country likely will receive uniform interpretation of Title VII on this issue from the Supreme Court at some point. Until then, the law in this area is truly a mixed bag. Employees in the Seventh Circuit have an additional cause of action to bring under Title VII, and employers in this jurisdiction may see a rise in these claims in the near term. For most employers outside the Seventh Circuit, employees are barred from pursuing sexual orientation bias claims under Title VII. However, alternate theories may be advanced, such as the plaintiff successfully did in the Second Circuit case. In addition, many state laws include sexual orientation protections.

While the law of the land is unsettled, one thing remains clear: employers that uphold principles of equal opportunity and fairness, and merit-based employment rewards, will fare the best.

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The attorneys at Schiff Hardin created this blog as a way to communicate news, developing trends and significant events in labor and employment law. We will discuss major court opinions, new legislation and administrative orders and rulings that in-house counsel, human resource professionals and business owners need to know and understand in order to maintain a fair, productive and efficient workplace.